13

IMPLEMENTING HOPE

Reform and Organisational Change under Harvey Barnett

The final classified version of the report on ASIO and the Australian Intelligence Community from the Royal Commission on Australia’s Security and Intelligence Agencies was distributed on 8 January 1985. The report ran to hundreds of pages and included a number of appendices. In essence, it indicated that ASIO had been concerned with ensuring its activities lay within its charter and that it had been ‘substantially successful’ in that endeavour. In contrast to the scathing commentary arising from Hope’s 1974–77 royal commission, this was welcome praise. But considerable renewal and reorganisation was still required in order to implement Hope’s new recommendations. This chapter outlines the major organisational changes implemented within ASIO during Harvey Barnett’s time as Director-General as a result of the royal commission. In particular, the chapter examines the procedural, technological, legislative and administrative initiatives introduced following the release of the royal commission reports through to the end of Barnett’s term as Director-General in mid-1985.

Reform implementation committees

One clear imperative arising from Hope’s work was the requirement for greater interdepartmental coordination and collaboration to ensure that a range of reform measures would be properly implemented. Several interdepartmental committees were given this task, with three of particular concern to ASIO. The first, the General Committee, considered the matters dealt with in Hope’s General Report concerning the Australian Intelligence Community. This included the impact of the Archives Act on the release of ASIO records to the National Archives of Australia. The second, the ASIO Committee, considered matters arising from the ASIO report other than protective security and foreign intelligence collection in Australia, which were addressed by a third group, the Protective Security Committee. ASIO also was represented on other intelligence-related committees.¹

To organise its response to the royal commission’s recommendations, ASIO created three small task forces, whose functions corresponded to the three Government committees: the General Task Force, headed by the Assistant Director-General (Secretariat); the ASIO Task Force, headed by Assistant Director-General (R Branch); and the Protective Security Task Force, headed by Assistant Director-General (C Branch). The task forces were required to produce the ASIO response to each relevant royal commission recommendation. These groups worked through February and March to prepare implementation arrangements, and by mid-April 1985 the interdepartmental committees had completed their reports. The SCIS considered these reports then lodged a submission and tabling statement for Cabinet consideration before release of a publicly available version.²

Procedural changes within ASIO

Apart from these changes to ASIO’s engagement with other agencies, a number of procedural reforms took place within ASIO as well. ASIO’s traumatic experience of intense media scrutiny during the royal commission proceedings, and its missteps in responding to ministerial and prime ministerial questions exposed during cross-examination demonstrated a number of internal procedural weaknesses. Internal ASIO methods, for instance, for handling parliamentary questions and ministerial inquiries were tightened up and articulated in detail in January 1984, to ensure that key decisions were made and specific officers assigned to the task with an accurate understanding of the urgency of those decisions.³

The Attorney-General, Gareth Evans, expressed concerns about ‘gaps in the system’. He was worried that urgent and operational matters could become mixed up with routine and non-operational matters, and sought to tighten up procedures to ensure that when appropriate he received urgent and operational information without it being buried in other less important communications.⁴ Recognising that ASIO had inconsistent internal recording mechanisms, Evans also insisted that documents be clearly categorised for ease of reference. Barnett issued instructions to this effect, ensuring that operational correspondence was addressed to Evans personally and not to the Attorney-General’s Department, and that all urgent matters were passed to his ministerial office and simultaneously copied to his department to enable prompt preparation of advice. This process was controlled and coordinated internally by the Secretariat Branch.⁵

In an effort to ensure that factual inaccuracies—of the kind that became evident in submissions made by ASIO during the Combe–Ivanov affair—were avoided in future, the head of counterespionage, John Ross-Perrier, was tasked with developing a set of procedures. These were used for compiling and processing critical submissions containing adverse advice on those people ineligible to appeal to the Security Appeals Tribunal. A key measure in this procedure was that information be checked for errors against original documents and at every stage those responsible for handling such documents should be required to sign and date them and indicate whether or not they approved of the content.⁶

The new accountability measures also made plain that while the destruction of files was previously endorsed by the Government, largely as a civil liberties concern, it had significant negative repercussions and was becoming ‘increasingly dangerous’ in light of ASIO’s accelerating exposure to examination by the Security Appeals Tribunal, Administrative Appeals Tribunal, High Court, state Attorneys-General—and soon the IGIS. In light of these concerns, files were now seen to constitute evidence enabling ASIO to defend itself against subsequent charges of malpractice. ASIO’s internal investigators also believed that ‘public attackers’ would attribute ‘the most sinister motives to the “destruction” of ASIO records’. It made sense, then, that even inactive files could be secured in storage beyond the reach of any real or imagined ASIO misuse or abuse. The head of Secretariat Branch, Michael Boyle, stressed that ASIO must continue to battle against the ‘manifest absurdity of the widespread public assumption (which even some ASIO officers share) that the subject of an ASIO file is ipso facto adversely recorded’.⁷

After Lionel Bowen replaced Gareth Evans as Attorney-General in mid-December 1984 he oversaw the implementation of the reforms recommended in Hope’s reports. Barnett went to see Bowen in Sydney on 18 December 1984 to discuss the Hope reports and a range of operational matters, including the structure and mechanics of ASIO’s internal organisation and roles. He also invited Bowen to visit Headquarters ASIO in Melbourne. Barnett was upbeat about his new minister, describing the meeting as ‘relaxed and friendly throughout’, and wrote that Bowen’s attitude ‘could not be described as other than warm and human’. Bowen was ‘at pains’ to make Barnett feel at ease and was a gracious host at lunch. Bowen spoke supportively, and Barnett informed him that he would get a ‘straight and honest service from ASIO’ and that he was ‘keenly aware of the political traps which could affect the incumbent of the [Attorney-General’s] portfolio’.⁸ Bowen visited Headquarters ASIO a month later, for in-depth briefings from the various branch heads, and a more detailed discussion of the Hope report and the major recommendations for ASIO.⁹

Automated data processing

One of the areas in which Hope had called for changes concerned automatic data processing. Files and filing had been an enduring challenge for ASIO, and Justice Hope had suggested that ASIO take steps towards computerising its records. Increasingly, as improved computerisation made data processing more widely available, there was recognition within ASIO that it should develop its own computerised information management network to reduce dependency on growing paper-based systems. The first steps had been taken before Hope’s review, as mentioned in Chapter 2, when one ASIO officer, Ian Thomas, was tasked to undertake a study. He observed that counterparts in the United Kingdom considered computerisation probably best used as a tool to support desk officers. Thomas observed:

They rightly couldn’t see how they could replace the paper database system at that stage of technical developments in computer systems or software in particular: it was impossible. But that sort of insight had escaped most people in ASIO. So you had a project team, you had a committee … and you had a whole gaggle of senior executives around it who were making wise decisions, none of them had seen a computer or understood what it could and couldn’t do. You also had a consultant team wondering, ‘Why did we take this job on?’¹⁰

In October 1982, Cabinet approved $2.4 million for a pilot stage of an ASIO computer system. Initially, the projected total cost of the project was $13 million.¹¹ Installation commenced in February 1984 at Headquarters ASIO in Melbourne, and the project was officially launched on 25 October, relying on a team from E Branch as the initial user group. The team commenced familiarisation with and trial usage of their Xerox Star Professional Workstations, which were processed through a mainframe computer. There were some initial problems, as several staff members with ‘complex anti-technological beliefs’ were uncomfortable with facing a visual display unit on their desks. Others, including secretarial staff, appeared threatened by the prospect of the technology making them redundant. In the end, however, the overwhelming majority of the team assigned to conduct the trial adapted well to the technology, and could see the potential it offered in terms of data storage and management.¹²

The system was reviewed in 1985 and widely considered to offer significant potential benefits, while there was widespread interest from other government agencies on how the project developed.¹³ But there was some delay with completing the pilot stage by 1986, mainly due to the difficulty of recruiting skilled staff in Melbourne in light of the Organisation’s imminent move to Canberra.¹⁴

In the end, the project would have to wait for full implementation until after the relocation at the end of 1986. It would not be until the end of the Cold War that funding was provided for the project’s full implementation.¹⁵

The impact of the Freedom of Information and Archives acts

Computer technology presented a real challenge, but an even greater challenge for ASIO arose from new legislation generated, in part at least, by the royal commission recommendations. From the outset, ASIO was exempt from the Freedom of Information Act 1982, but the Archives Act 1983, which gave the public a mechanism through which they could request access to ASIO records, caused headaches and concerns for ASIO. Principal among these was the continuing need to protect intelligence material and, as had been the case since the earliest days of ASIO, to protect the source of the overseas material that had led to ASIO’s establishment. At considerable expense, a significant number of additional staff would be recruited by ASIO to manage the workload arising from this legislation.

Following the introduction of the Archives Act 1983, a number of journalists and writers started making applications for information from ASIO’s records. Winston Burchett, for instance, requested access to his brother Wilfred’s files, but the amount of documentation was so great that the resources required by several departments to research it threatened to ‘substantially and unreasonably divert resources’ from other operations. ASIO staff were concerned that the Archives Act 1983 affected the whole intelligence community, and that while there was machinery for exempting certain documents, each document had to be examined on its merits.¹⁶

In May 1985, Michael Boyle, the Assistant Director-General of the Secretariat Branch, wrote to Barnett outlining what he described as ‘a serious problem’ regarding the need to protect special intelligence received from overseas that ostensibly could be requested by the public. First, journalist Richard Hall had sought access to ASIO’s and the Department of Foreign Affairs’ holdings on Ian Milner, one of those caught up in ASIO’s early counterespionage work as discussed in Volume I. Among the holdings was a document that discussed the nature of the source of the information against Milner—the signals intelligence known as Venona.

Similarly, Ric Throssell, another former officer of the Department of External (later Foreign) Affairs caught up in that investigation, had sought access to his departmental file, within which there were several references by External Affairs Secretary Alan Renouf to there being ‘special intelligence’ in Headquarters ASIO. Boyle observed that ‘the exempting of the most security sensitive documents tends to focus on the facts which we are trying to protect’.¹⁷

Third, Canberra Times journalist Jack Waterford had analysed the Royal Commission on Espionage and was seeking access to material concerning the then still secret Venona decryption program that allowed the United States and Britain to read Soviet diplomatic communications—including some from Australia that mentioned Milner and Throssell. The implications of this material and the Royal Commission on Espionage are examined in detail in Volume I.

In short, Boyle was concerned that Waterford, and others, ‘may soon pick up the trail of the “special intelligence” ’ (Venona). To Boyle, the juxtaposition of these research activities raised ‘a high risk of compromise of the UK/US source which provided Australia with the information in the first place’. Boyle observed this information remained ‘of continuing value’. He advised Barnett that the British needed to be informed of the nature of the inquiries and of the problems that might have to be faced in arguing the case before the Administrative Appeals Tribunal if any of those concerned lodged appeals. Boyle was not suggesting that ASIO’s arguments would be overturned, ‘but even with a ministerial certificate (certifying that disclosure of evidence would be contrary to the public interest because it would prejudice security) we would still be forced to explain to the tribunal the reasons for the certificate being granted which may result in having to brief the [Administrative Appeals Tribunal] on the circumstances wherein the information was passed to the Australian Government in the first place’.¹⁸ Management of this kind of information would generate the need for continued close interaction with American and British authorities for decades.

Boyle issued a telex shortly afterwards establishing the ‘action to be taken to identify and protect a privileged class of intelligence relating to events which led to the creation of ASIO’. With the agreement of the Department of the Prime Minister and Cabinet and DSD, ASIO was tasked with coordinating the collation of all identifiable information within the archival holdings of the departments of Foreign Affairs, Defence, the Attorney-General, and of the National Archives of Australia that ‘indicates or may indicate the existence of special UK liaison material’. Once collated, this material was to be examined by the Australian government agencies concerned, with the intention of providing the Venona material ‘with the appropriate protection from public disclosure, possibly by obtaining a ministerial certificate’.¹⁹ The existence of Venona was finally revealed in the 1990s.

The Security Appeals Tribunal and the Rix case

The ASIO Act 1979 and the establishment of the Security Appeals Tribunal came about as a result of recommendations made by the first Hope Royal Commission completed in 1977. They were implemented before the completion of the second Hope Royal Commission, but much of their impact would be felt during its hearings. The ASIO Act 1979 and the Security Appeals Tribunal had set the groundwork for a significant challenge to established practices. This particularly applied to the granting of security clearances for those associated with the CPA. To the well informed, certain provisions of the new legislation made clear that it was only a matter of time before ASIO’s established vetting procedures would be challenged. Stephen Darcy Rix provided the test case that led to a major overhaul.

Rix applied for a position in the Australian Public Service and in November 1981 completed the mandatory security questionnaire, in which he admitted to being a member of the CPA, and the Young Communist Movement (YCM). The Department of Trade and Resources, where he was to commence work, requested a security assessment, and Rix was interviewed by an ASIO officer in February the following year. On 9 June 1982, the recommendation was made that Rix should not be granted the access proposed ‘because to do so would not be consistent with the requirements of security’. The rationale given by ASIO was that ‘The CPA and the YCM are considered to be subversive organisations aimed at overthrowing or destroying the constitutional government of the Commonwealth or of a State or Territory’.²⁰

On 12 July 1982, Rix applied under Section 54 of the ASIO Act 1979 for a review of this assessment. The Security Appeals Tribunal heard evidence from the Director-General and from Rix. Further submissions and hearings were held in February and early April 1983. The tribunal observed that there was no independent allegation against Rix so that the case depended solely on his membership of the CPA and YCM.²¹

Inside the Organisation, a monumental debate was going on between those who believed the CPA was no longer a threat and those who still considered it to be one. The importance of the Rix case for ASIO officers was that it crystallised this dispute, which soon became acrimonious. In short, the ideological debate going on outside the Organisation was also taking place within the Organisation, and would continue until the collapse of the Soviet Union in the early 1990s.²²

The tribunal found that for the purposes of the ASIO Act, ‘subversion’ was ‘inexorably linked to the use of force or violence or other unlawful acts’, noting that there was a difference between legitimate dissent, however radical and uncompromising, and domestic subversion. It found that ‘Advocating the use of force or violence for the purpose of overthrowing the constitutional government’ would constitute subversion.

The question then turned to whether the CPA’s latest manifesto, as published in the pamphlet ‘Towards Socialism in Australia’ and adopted by the party congress in June 1979, advocated the use of force or violence to overthrow the Government. On this, the tribunal decided, ‘we can say at once that it does not contain any such statement in explicit terms’, although the pamphlet employed language of ‘fertile ambiguity rather than precision’. The tribunal continued, ‘we cannot conclude that … the CPA’s definition of itself as a revolutionary Marxist party is enough to establish its advocacy of, or participation in, activities of the kind in question’. It concluded that Rix had not been engaged in any activity of a subversive kind, and therefore that ‘the assessment [by ASIO] cannot be supported’.²³ In the tribunal’s opinion, the act did not consider questions of loyalty or fitness for office except insofar as they related to security, and it did not otherwise ‘in any way restrict the right of every person to advocate particular political or ideological views and to seek to persuade others to the same opinion, provided the means adopted are within the law’. To the surprise of ASIO, the tribunal ruled therefore: ‘It is not recommended that Mr Rix should be denied the access proposed on grounds of security.’²⁴ This was a momentous decision, and in time would cause a fundamental rethink of ASIO’s work.

In spite of this outcome, ASIO initially had no intention of withdrawing its coverage of the CPA or of changing its policy of providing adverse recommendations to CPA members. ASIO even considered appealing to the High Court or to the royal commission (which was still underway), recommending an amendment to the definition of subversion. It did recognise, nonetheless, that because the CPA was a small organisation with no firm links to foreign communist parties, the tribunal’s decision would not be ‘opening the floodgates’ to foreign espionage or compromising international intelligence liaison links.²⁵

By September 1983, however, it was clear that continuing as it had was untenable, and a message was sent out to all regions that ASIO was considering declaring that as the CPA was not a subversive organisation, it ‘should no longer be considered a target’. Furthermore, all sources were to be ‘withdrawn and either re-targeted or terminated, in a manner consistent with operational security’. From then on, monitoring of the CPA was to be limited to the study of overt party documents at headquarters.²⁶ Thus, after more than 30 years, ASIO finally dropped the CPA from its list of targets.

At Headquarters ASIO, S Branch initiated a comprehensive review, completed by mid-December 1983, to determine the security status of the CPA given the provisions of the ASIO Act 1979.²⁷ It concluded that first, ASIO could no longer sustain its belief that the CPA was poised towards violent revolution. Rather, it was ‘moving slowly towards democratic socialism’.²⁸ Secondly, the CPA was independent of foreign domination, control or influence, and its existing links with foreign parties were consistent with its published program of fraternal links.²⁹ Thirdly, the propensity for future subversion was insufficient to warrant action by ASIO. There was either a current threat or no threat at all.³⁰

In light of these observations, it was clear to ASIO management that there could be no challenge to the tribunal’s decisions. The CPA was neither subversive within the meaning of Section 5 of the ASIO Act, nor potentially subversive within the guidelines contained in the Fourth Report of Justice Hope’s first royal commission written more than five years earlier.³¹

In a memorandum to all staff in May 1984, Barnett outlined the significance of the Rix case, ASIO’s internal review and its own conclusions about discontinuing blanket coverage of the CPA. He was, however, reluctant to entirely discontinue ASIO’s interest in the CPA. He therefore ordered that ‘carefully limited and selective coverage of certain members of the CPA’ be maintained until the future prospects of the CPA had been resolved—a decision about which was expected at the CPA National Congress scheduled for mid-1985. Barnett authorised a watching brief to facilitate continued covert coverage of the debate. Agents no longer required were to be withdrawn over the next eighteen months. In addition, the majority of files on the CPA and on CPA personalities were to be closed.³²

Planning for the move to Canberra

Notwithstanding the reform measures being implemented, perhaps the most significant event that helped improve ASIO’s relations with other Federal Government departments was the move of Headquarters ASIO from Melbourne to Canberra. Attorney-General Gareth Evans believed the move would address many of the arguments concerning ASIO’s jurisdiction, accountability to the Government of the day and finances. It would also see ASIO more closely linked into the public service, thus offering greater employment mobility for personnel. There was ‘no reason’, Evans said, ‘why ASIO should be locked into the world of intelligence officers or kept to the cold war warriors’.³³

Barnett, like his predecessors, had some concerns about the suitability of ‘light cover’ (the explanation used casually in social settings about where one worked and what one did without giving away one’s role in ASIO) for his officers who were meant to keep their employment with ASIO secret. Given the new location’s close proximity to the Defence Headquarters in the Canberra suburb of Russell, he approached Sir William Cole, Secretary of the Department of Defence, with a view to acquiring Defence cover for ASIO officers. Cole, however, ‘felt duty-bound to refuse’. The existing cover arrangements would have to suffice.³⁴

ASIO staff had known for some time that the headquarters would be moving to Canberra, but they did not know when. As this became more commonly known it became difficult to recruit, particularly given the long lead time required for personnel security checks. In the interim, retired staff and family members of current staff were employed on a temporary basis to fill the void.³⁵ Of major concern was the anticipated loss of staff who would not want to move from Melbourne to Canberra. Worse, such a loss, both in numbers and experience, would be difficult to address. Barnett recognised that this required some reallocation of residual staff to better meet exigencies caused by the transfer. Key personnel prepared to make the move to Canberra were positioned in important appointments to ensure continuity and retention of corporate knowledge.³⁶

Barnett engaged closely in 1984 with the Chairman of the Public Service Board, Dr Peter Wilenski, and the Secretary of the Attorney-General’s Department, Pat Brazil, as well as the ASIO Staff Association, to manage the terms and conditions and inducements for people to stay with ASIO. They also discussed fair and reasonable redundancy arrangements for those who decided to stay in Melbourne. Apart from fulfilling any legal requirements, the object was to minimise the prospect of disgruntlement, which could lead to leaks or other security problems. Barnett emphasised to all staff that the conditions being offered were ‘considerably in advance of those given to other Commonwealth employees’.³⁷

Some disaffected members of the Staff Association did not feel the same way, and in early February 1985 threatened legal action unless a suitable agreement was produced within fourteen days. Barnett persuaded the association to postpone legal action in order to reach agreement outside of the courts.³⁸ A series of urgent meetings took place in the days that followed. The Public Service Board, ASIO and the Attorney-General’s Department agreed to prepare an interim staff agreement.³⁹

Those involved in the deliberations did not anticipate the Prime Minister’s reaction to the manoeuvrings of those disaffected with the plans for the move. Already exasperated by Public Service Union actions elsewhere, Prime Minister Hawke was simply not prepared to entertain a large payout to anyone, particularly to ‘ASIO officers making importune demands’.⁴⁰ The Government was becoming a victim of its own generosity in that the redundancy package under consideration was so good that an abnormally high number of staff was prepared to take it and leave ASIO.⁴¹The Prime Minister decided ‘in principle’ to cancel the transfer of Headquarters ASIO to Canberra and to give the new building instead to the AFP. Press reports noted: ‘It is apparent a hard core of ASIO employees are responsible for the demands that have angered Hawke and the Government.’⁴²

This generated a flurry of internal correspondence, particularly focusing on why the Organisation must move to Canberra. Michael Boyle, for example, wrote a lengthy telex to Canberra reiterating the strong reasons justifying the move that had already been established.⁴³ The president of the Staff Association appealed to the new Attorney-General, Lionel Bowen, for the decision to be reversed.⁴⁴ The matter featured in the newspapers over several days, although both the Prime Minister and Attorney-General denied in Parliament that the Government had decided to scrap the move.⁴⁵

The leaks to the media angered Bowen. Barnett met with him and assured him that strong disciplinary action would be taken should the culprit of the leaks be revealed.⁴⁶ He explained that the dissident officers who had triggered such a reaction from the Prime Minister were a small group and were outvoted on the Staff Association. He also explained that more staff wanted to make the move to Canberra than stay in Melbourne. Most professional, career-conscious intelligence officers, he noted, would elect to move to Canberra if treated reasonably by the Government, and the bulk of those who did not want to were in the clerical and ancillary stream. Barnett argued that ASIO’s efficiency, competence and relevance would be seriously compromised if the headquarters remained in Melbourne. He noted also that his staff were not members of the Australian Public Service and therefore not eligible for transfers to other departments. He appealed for ASIO not to be singled out for ‘repressive treatment’.⁴⁷

The matter was made more compelling by public financial forecasts estimating that cancelling the relocation from Melbourne would save about $30 million, but that a new purpose-built headquarters in Melbourne would cost $28 million, without any of the identified benefits of moving closer to the government bureaucracy in Canberra.⁴⁸ Barnett was able to report to staff that his meeting with Bowen went very well and ‘the question of the move is now back on track’.⁴⁹

In fact, the rhetoric now shifted from cancelling the move to forcing staff to make the move, without the financial incentive to leave ASIO.⁵⁰ Barnett urged caution, advising senior officials outside ASIO that what was bothering ASIO staff was the Government’s attitude towards them. He stressed they should not be treated as second-class citizens. Barnett indicated the Staff Association had ‘gone quiet’, but invoking disciplinary sanctions ‘could well inspire legal action and the Cabinet could be left with political and legal egg on its face’.⁵¹

Deliberations continued into April and May 1985, generating considerable stress for ASIO officers and their families. Some spouses considered writing to either the Prime Minister or their local member to complain about how they were being treated.⁵² In an attempt to settle the issue, Barnett wrote to Bowen that morale was low and a common thread was the level of uncertainty over the timing of the transfer. Anxiety among staff, particularly those with families who wanted to make the move, ‘would be appreciably lowered as soon as they have a date to work on’.⁵³ With little to show for his endeavours, Barnett took up the matter with Sir Geoffrey Yeend, Secretary of the Department of the Prime Minister and Cabinet, who told him he would do his best to convince the Prime Minister that an early decision was required.⁵⁴

Harvey Barnett looks to retire as Director-General

In hindsight, it appears Barnett’s heart was no longer in it: he simply was not that motivated to argue for the move, to make the move and to make sure that he brought the majority of the Organisation with him. His handling of the Staff Association made this evident, as did his lack of persuasiveness with the Prime Minister and Cabinet, and his own personal connection with and desire to remain in Melbourne. Besides the appreciable administrative burden a move would entail, all these factors combined to render Barnett not the best person to ensure a successful move. To be fair to Barnett, he had a harrowing experience as Director-General particularly during the second Hope Royal Commission and the considerable critical public exposure during its proceedings. He had overseen substantial reforms already, and was running out of energy and enthusiasm for the job.

On his appointment as Director-General, Harvey Barnett had appeared to bring a fresh approach to the management of ASIO. He was not a judge but a career intelligence officer, albeit one who had spent most of his career in another intelligence service. He had been groomed for the job, having several years’ experience as Deputy Director-General to Woodward. According to one middle-level ASIO manager, Barnett raised staff morale, particularly among ‘analysts and a number of those who wanted to think more rationally about the job. But he wasn’t respected in the state offices.’ It appears, however, that because of the Combe–Ivanov affair ‘Harvey really lost any reforming potential’, having been ‘crippled’ by the experience.⁵⁵

Barnett’s Executive Officer, Liz Marks, recalled that he was:

A lovely man. I have a great deal of respect for him but [he was] a very much softer personality, much more used to working in the undercurrent than actually being in the forefront. And that’s why the Royal Commission following the Combe–Ivanov affair took a very, very significant toll on him personally. You know, the Organisation was still in Melbourne, not in Canberra, so still distanced from the politicians in Canberra so quite different … However, I think perception at the more senior levels, including in Canberra, was Harvey was not really the sufficiently strong, robust person to actually be leading the Organisation at that point.⁵⁶

Barnett was evidently a very capable intelligence officer and a good man, but he wanted to be liked by all. It appears he was simply not ruthless enough, and the royal commission undid him as Director-General, shaking him to the core.

Approaching the age of 60, Barnett called on Lionel Bowen at his Australia Square Office on 7 June 1985 to talk about a range of issues, including that he wanted to retire and to talk about who might replace him as Director-General of Security. In late June, Barnett inquired whether Bowen had made any progress in obtaining a judge to become the next Director-General. Bowen said a judge in Victoria had been approached but had declined. He told Barnett he was ‘now not certain that a judge would be any good’, and that he had doubts about Judge Woodward’s performance as Director-General. In his ‘note for file’, Barnett did not explain what those doubts were, but he recorded that he defended Woodward’s tenure, which also reflected upon Barnett’s tenure as Deputy Director-General.

Bowen declared that he had discussed the whole matter of ASIO’s leadership with the Prime Minister and the National Intelligence and Security Committee of Cabinet. There was ‘intense political interest’ in ASIO within the ALP, he said, and indicated that these were ‘pressures which had to be taken into account’. With the matter of the next Director-General so contentious, he did not think someone seen to be associated with the ALP could fill the post, and asked Barnett if he could recommend someone from within the Organisation. Barnett recorded: ‘I declined to do this for, like myself, I believe an internal appointee would be tainted as a “spook” and suffer the same fate as I. Also, I added I did not think there was anyone yet ready for the job in terms of experience.’⁵⁷

To Barnett’s surprise, the issue of the move to Canberra came up again. Bowen suggested it be postponed or even cancelled, but Barnett recorded that he pleaded with him to proceed ‘in the national interest’, drawing attention to the ‘calamitous effect’ not moving would have on ASIO’s morale. Despite a Cabinet Decision of 1 April 1985 approving the move, Bowen reaffirmed it was not certain the transfer would proceed.⁵⁸

Bowen told Barnett that the next Director-General should have a say about whether and when the move to Canberra should take place. The Prime Minister also thought it proper for the successor to make the decision as to whether ASIO should transfer to Canberra or not.⁵⁹ The Attorney-General was still concerned that the separation payments for the 200 ‘avaricious people’ who wanted to stay in Melbourne would be too high. Barnett defended his staff, indicating that the militants who had worried the Prime Minister were no longer an influence and had been discredited within the Organisation. ASIO officers, Barnett added, were more interested in job satisfaction and the philosophy within management was to attract as many people to Canberra as possible. In the end, Bowen agreed he would look for a new Director-General as a ‘matter of importance’ and would keep in touch with Barnett about it.⁶⁰

Just over two weeks later, on 25 June 1985, Bowen rang Barnett to say that the matter of his successor had been settled and to arrange a meeting to discuss it in detail.⁶¹ Two days later, Barnett met with Bowen in Sydney and was told that the Defence Minister, Kim Beazley, had nominated someone from within his department who would be able to take up duties within two to three weeks, although Bowen still declined to name him. Barnett surmised he was a public servant and a civilian. Barnett asked for the announcement of his replacement to be timed until after the announcement of his retirement, to help him personally ‘to step down with some degree of honour’ and enable him to prepare the ground with ASIO staff for the new incumbent. Barnett noted there was already press speculation and that the sooner the statement was issued the better. Bowen agreed to raise the matter with other members of the National Intelligence and Security Committee the following week.⁶²

Barnett admitted in his valedictory telex to all staff that the previous two years had been ‘rather wearing’. With the Hope report out of the way, he argued, ‘I believe the organization has reached a natural watershed in its history when it makes eminent sense for a new [Director-General] to set the course for the future in which by career commitment he will have a personal stake. The Government endorses this view.’ Barnett admitted he had wished to have the Hope report and the Canberra transfer out of the way before he finished, and that he was disappointed the question of the move was still to be resolved.⁶³

Reflections

Looking back over Barnett’s time as Director-General of Security, it is fair to say that considerable improvements were made in the way ASIO responded to Government direction, and that a range of reform measures were introduced and consolidated with relatively little acrimony. But the work of organisational renewal undertaken through 1984 and 1985 had taken its toll on both Barnett and ASIO. With so much turbulence arising for the Organisation from the intense public scrutiny and cross-examination of the second Hope Royal Commission, it faced a number of significant challenges as it sought to implement a range of procedural, technological, administrative and legislative reforms. The gentlemanly Barnett was, from one perspective, the ideal man to handle the delicate task, although it became increasingly apparent that for further foundational changes a stronger hand at the tiller was required.

The royal commission’s recommendations called for considerable organisational renewal within ASIO, but the measures affecting the spectrum of Australian intelligence agencies beyond ASIO were more profound. The appointment of an Inspector-General of Intelligence and Security, for instance, significantly altered the intelligence landscape. This new arrangement imposed on ASIO and the other intelligence agencies the enduring powers of a royal commissioner to introduce changes, and to probe, question and challenge all those involved on the way they conducted their business. This would have a dramatic effect in terms of bolstering the Organisation’s accountability, but it would also generate a significant additional workload that would, in turn, lead to demands for increased staff numbers to address and respond to the oversight requirements.

Even with all these changes underway, significant reform was still required, in addition to the enduring and apparently relentless range of security challenges that had to be addressed. Principal among these was the need to bring ASIO physically closer to the central workings of government, to help it become more accountable, responsive and in tune with government expectations and requirements. As we shall see, a new director-general would be called upon to undertake that work.